RAJASEKHAR NAIDU GALLA,TIRUPATI vs. DCIT., CIRCLE-1(1), TIRUPATHI

Facts

The assessee, Rajasekhar Naidu Galla, filed his return for AY 2020-21, declaring income of Rs. 29,31,680. The assessment was completed under Section 143(3) r.w.s. 144B. The Principal CIT (PCIT) initiated revision proceedings under Section 263, holding the assessment order erroneous and prejudicial to revenue. The PCIT's order was challenged by the assessee.

Held

The Tribunal held that the Assessing Officer (AO) had made proper enquiries and accepted the assessee's explanation regarding the capital gains/loss from the relinquishment of rights in property. The PCIT erred in assuming jurisdiction under Section 263 as the AO's order was neither erroneous nor prejudicial to the revenue.

Key Issues

Whether the PCIT was justified in invoking Section 263 to revise the assessment order, and whether the AO's assessment order was erroneous and prejudicial to the interest of the revenue.